Santa Fe Real Estate News & Market Trends

You’ll find our blog to be a wealth of information, covering everything in the Santa Fe real estate market, from local market statistics and home values to community happenings. That’s because we care about the community and want to help you find your place in it. Please reach out if you have any questions at all. We’d love to talk with you!

Aug. 16, 2021

Buying and Selling a House at the Same Time

Unless you are a first-time homebuyer, you may end up in a situation where you are buying and selling a house at the same time. This makes the home buying and selling process a little more complicated. What happens if you buy a house before you have sold the house you are living in? Should you sell the house you live in first, buy a house first, or can you buy a house and sell a house at the same time?

There is more than one approach you can take when you are trying to buy and sell a house at the same time. Which approach is better depends on your finances, the market, and the reasons for moving? The easiest way to do this is to sell your house first. This way you aren’t covering two mortgage payments when you go to sell your house. However, there are ways to arrange a sale and purchase of a home at the same time. Keep reading. We will explain the options so you can better decide.

Selling first, then buying

Pros of selling a house first

  • You don’t have to worry about how long your house will take to sell
  • You don’t have to cover 2 mortgage payments
  • You know how much equity you have to work with
  • You won’t be rushed to buy


Cons of selling a house first

  • You won’t be able to make offers on a house while you are waiting
  • You will probably have to find a rental or temporary living situation
  • You will have to pack and move twice

Realtor handling couple keys to a house

While this is the easiest way of buying and selling a house at the same time, it’s not necessarily less stressful. If you sell your house first, you don’t have to rush into purchasing a house. You can take your time and find the house you truly want. But, it often involves finding a place to rent temporarily while you are looking for a house. Depending on when you move out of your house, you could be stuck renting for longer than you anticipate. Finding a short-term rental can be a hassle, especially if you don’t know how long you are going to need to rent.

Right now there is a shortage of Santa Fe homes for sale, which means selling your house may go more quickly than buying a house. This can make the process easier. Once you sell your house, you may have equity to work with and can immediately start looking for a new house. 

Things to do before you sell your house


Before you consider selling your house, talk to a realtor. The Bigelow Team of Santa Fe real estate brokers can help you decide which step to take first. If you plan to sell your house so that you can buy another, you need to be certain that you won’t have any issues financing the second house. It will be easier to qualify for a mortgage once you sell your house, but it’s a good idea to talk to a real estate agent before you start the process. Knowing your credit score, your income to debt ratio, and how much you’d like to spend on your new house, will help you prepare for buying a house once you sell your current home.

Buying a house first, then selling

Pros of selling first

  • You will have more time to look for a house
  • You will be able to move into your new house more quickly
  • You only have to move once
  • If the home sale falls through, you still have a house to live in
  • You will have more time to prepare for selling your current house

Cons of selling first

  • You may not be able to get financing
  • You may have to pay two mortgages while you sell your house
  • You may feel more pressure to sell your house quickly
  • You will be responsible for taxes and insurance on two houses

couple selling a house and moving into a house they just bought

Most people will not be able to qualify for a second mortgage while they currently have a mortgage. Even if you can qualify, you may not be able to get the kind of loan you would get if you sold your house first. However, there are some options for buying a house first.

Use your savings

If you have enough in savings you can use your savings for a down payment to finance a loan on a second home. Once you sell your house, you can either keep the savings in your home as equity or take the profit from the sale of your home to reinvest in savings.

Rent your house

If you’re ready to buy, but not quite ready or committed to selling your house, you could rent it temporarily until you are prepared to sell it. This has its pros and cons but it may allow you a little more time to prepare for selling it.

Ask for an extended closing

If you buy a home before your house is sold, you can ask for a contingency that allows you to extend the closing date by 30-45 days. In a good market, this should give you the time to wrap up the sale of your current home before closing. You can then use the equity in your house to use towards the purchase of the new house.

family moving in to new house

Buying and selling a house at the same time

There are now programs for people just like you, that are trying to buy and sell a house at the same time. Lenders are aware of the predicament this puts buyers in and have created a few programs just for this situation. Talk to your realtor to see if they can help you find a lender to work with.

You may qualify for a bridge loan. A bridge loan is a short-term loan that provides you with the money for a down payment while you are selling your house. This is one way that lenders make buying and selling a house at the same time possible. You can borrow the money for a down payment on your new home. Once you sell your house, you repay the bridge loan.

July 26, 2021

What is Earnest Money When Buying a House?

If you are starting the process of buying a house, you may be wondering what is earnest money and how much should you pay in earnest money? Earnest money is a “good faith” deposit you make to the seller to let them know you are committed to purchasing their house.

If you are planning to buy a home in Santa Fe, you probably know you need to budget for a down payment and closing costs, but you may not have budgeted for earnest money. When you make an offer on a house, you provide the seller with earnest money. This is especially important if they have multiple offers on their home.

What is earnest money?

When a seller receives an offer from a buyer, they take their home off the market. This is why earnest money is so important. It provides the seller with security. This way the seller isn’t going into a purchase agreement with a buyer who’s just thinking about buying the home. Without earnest money, the seller could miss out on other buyers’ offers or take their home off the market for weeks, only for the buyer to change their mind. 

Woman shaking hands in good faith agreement

How much should you pay in earnest money?

Generally, you can expect to pay around 1-3% of the home’s purchase price in earnest money. So if you are looking at a $200,000 house, you would need to put down anywhere from $2,000 to $6,000 in earnest money. If you have money saved for a down payment, you can use some of these funds for earnest money.


There is no rule for how much you have to put down as earnest money. However, if the seller has multiple offers, earnest money may help them to decide which buyer to work with. Putting down a large amount of earnest money lets the buyer know you have the funds to buy the house and may help your offer stand out.

calculator used to calculate earnest money

Is earnest money refundable?

One of the concerns buyers have when purchasing a home is how much they have to spend before they can even purchase the home. Before a buyer agrees to purchase a home, they put earnest money down and pay for a home inspection. What if they invest this money and decide they want to back out?

Contingencies can be written into your purchase agreement to protect your investment as the buyer. Your realtor can request contingencies based on a home inspection, home appraisal, and title search. If there are issues with the home or property that come out during the inspection, you can back out of the agreement or renegotiate. Additionally, if the home inspection goes well, but the home appraisal states that the fair market home value is less than the amount in your agreement, you can back out. If contingencies are written into your purchase agreement, you can get a refund of your earnest money and look for another house.

Can you use earnest money towards your down payment?

Earnest money is placed into an escrow account until closing. It is a deposit to secure the home. It’s not a fee that just goes to the seller. Unless you back out of the agreement (without an agreed-upon contingency), the seller can’t just keep the money. It goes into escrow and can be used towards closing costs or your down payment.

couple looking at finances

What if you don’t have enough saved for the earnest money?

In most situations, earnest money is a must-have when buying a home. This is especially true in a hot real estate market like we have currently. With other buyers to consider, not having anything to put down in good faith will make your offer less attractive. If you don’t have earnest money or don’t have enough earnest money, you can talk to your realtor about how to waive the earnest money when you write your offer. Although there is a good chance the seller will require earnest money, you may be able to pay less or waive the earnest money if you have solid financing. Even offering $1,000-$1,500 in earnest money shows good faith.

Ideally, you put aside money for a down payment before you started searching for a house. This can be used towards your earnest money, and will still count towards your down payment. If you are still short on cash, talk to your realtor about what to do. They are your best ally when you are buying a home.



Posted in Buying A Home
July 13, 2021

Checklist for Selling a House

You’re ready to sell your house and you’re not sure where to start. There are quite a few steps to selling a house. A lot of people like having a checklist to work with when they are planning big events in their lives. We’ve put together a handy checklist you can use to prepare for selling your house. Here’s a quick and easy checklist you can use.

Talk to a Realtor

Before you even start working on your checklist, you should talk to a realtor. Some of the things you may be worried about doing first may not even need to be done. Your realtor can help you prioritize things that need to be taken care of before you can sell your house. Even if you’re just curious what your home is worth or if it’s a good time for you to sell your house, a conversation with a realtor can help you figure it all out.

home with money behind it

Get a Home Valuation

Find out what your home is worth. You can’t really start the process of selling your house until you know what you’re home is worth. Once you have an idea of how much you could potentially sell your house for, you can start taking all the steps needed to get it listed and sold. We offer a free home valuation tool. This is a good starting point, but not a realistic way to determine your home’s worth. Call the Bigelow Team and we will help you determine what your home could sell for in today’s market.

Get your home ready to sell

Once you’re ready to get the ball rolling, this is the time to start preparing your house for showings. You want your house to be in the best condition possible. This is the time to detail clean and declutter your house, fix any minor repairs, touch any paint, and clean your carpets. How your house looks, smells, and feels to potential buyers is a critical aspect of selling your house. If the exterior of your house needs some work, consider hiring a landscaper to improve your curb appeal. Your realtor can even help you with ideas for finishing touches.

List your home 

When you’re ready to sell, you want to start off right. Picking the best day to list your home and the best listing price, is the best way to get buyers looking at your house quickly. Your realtor will help you determine a competitive list price that will attract the most potential buyers. They will also help you with marketing and advertising your house to potential buyers.

real estate closingPlan for showings

You want your house in tip-top shape and ready to show. The little things make a difference. Make sure you clean everything before you showing. If you have children, consider putting some of their toys in storage until you’re ready to move. Empty any trash cans, clean your refrigerator and areas you might not think a buyer will look at. How you take care of your house gives your buyer a strong impression of how your home was maintained. Your realtor will take care of showing off the best selling points of your home and answering buyers’ questions.


Take offers

Be prepared to receive multiple offers and negotiate. If you know going into the sale that there might be areas your buyers might want to negotiate on, talk to your realtor ahead of time. It is not uncommon for buyers to ask for seller’s concessions. If you receive multiple offers, your realtor will help you decide how to decide which offer is best or how to negotiate counteroffers.

Prepare for closing

You may have expenses, fees, or paperwork to take care of at closing. Talk to your realtor about closings costs and what you need to take care of for closing. Be prepared to move out quickly. Depending on your purchase agreement, you may need to move out of your home shortly after it sells.

Selling a house checklist


Checklist for selling a house

1-3 months before you sell

  • Take care of minor repairs
  • Paint/touch up paint
  • Check out the market if homes for sale in your area
  • Contact a realtor

30-60 days before listing

  • Detail clean your home
  • Declutter, donate and get rid of anything you don’t plan to take with you when you move.
  • Take care of any paperwork and any financial matters that need to be addressed before selling
  • Work on your home’s exterior and curb appeal
  • Discuss a marketing plan with your realtor

2 weeks before listing

  • Do a final deep clean of your home
  • Consider hiring a professional photographer to take photos of your home
  • Discuss staging for your house with your realtor
  • Get ready for showings

Posted in Selling A Home
June 23, 2021

How to Negotiate When Selling a House

Selling a house can be stressful. There are a lot of steps involved in selling your home. You want to make sure everything goes smoothly, and that ultimately you’re satisfied with the price and conditions of the sale. When it comes time to negotiate, what should you be prepared for? How can you work with your real estate agent to negotiate the best terms for the sale of your home?

n general, there are a few main areas of negotiation that come up when selling a home. These include the what to do with multiple offers, the purchase price, closing costs, leaving items that belong to you with the home, and requests for home repairs. 

These are a few examples of things that are frequently negotiated during the selling process. The negotiation process can involve several back-and-forth discussions, offers, or counter-offers, between buyer and selling. Continue reading to learn more about how to best negotiate these issues when selling your house.

real estate agents negotiating the sale of a house

How to negotiate when you receive multiple offers?

A seller will often receive multiple offers on their house. This can be very exciting, but also create a scenario where you’re not sure of the best strategy to take. When you have several offers to consider, this is a good opportunity to ask for a higher purchase price, but how should you go about negotiating this.

Typically, there are two approaches you can take when dealing with multiple offers. You can approach all the buyers, and start a bidding war. Or, you can negotiate with the offer you like best and tell them you have multiple offers.

The most common negotiation strategy is to use this situation to leverage a bidding war between the prospective buyers. Your realtor can approach all the buyers and inform them that you have multiple offers to consider. You can ask each of the buyers if they would be willing to consider a counteroffer, Although this sounds like the best approach, there are drawbacks to this approach. If your buyers have all given you a fair offer, they may back out of the sale. This can give you some advantages if you need to negotiate other issues, such as move-out time, requested repairs, or closing costs.

The second strategy is to negotiate with the buyer who put in the top offer. When it comes to selling a house, there are other factors to consider other than just price. Financing, closing costs, and other aspects of the buyer’s office can be negotiated at this time. If your top offer knows you have other offers, they may be more willing to agree to other terms of the sale.

couple who just received a low offer on their house

How to negotiate when you receive an offer lower than your asking price?

Ideally, you will receive multiple offers on your home at or above your asking price. However, this doesn’t always happen. This is one reason it’s important to work with your realtor on the best price for competitively listing your home. Even when you receive an offer below your asking price, there is still an opportunity for negotiating.

In general, there are three ways to handle this situation, where a buyer offers below the asking price. You can come back to them with a counteroffer that meets them in the middle. You can stick with your original offer or ask for concessions in the terms of the offer.

One of the easiest ways to handle this is to make a counteroffer somewhere between the original asking price and the offer price. This strategy often works. Like sellers, buyers go into the offer trying to get the best possible price. They are usually prepared to negotiate.

If you are firm on your asking price, you can counter with your original asking price, or counter with your original price making concessions in other terms of the sale. This is a good time to talk with your real estate agent who is experienced with negotiations. They can help you determine which strategy is best to use.

What can you do if the buyer asks you to cover the closing costs?

Typically the buyer covers the closing costs during the sale of a home. However, if a buyer is concerned about the cost of closing or has the financing to cover above the asking price, they may ask the seller to pay all or some of the closing costs. This is an area that can be negotiated.

Generally, the seller has a few options they can consider if a buyer asks them to cover closing costs. They can accept or reject the offer or they can negotiate by making a counteroffer. This typically involves increasing the sale price to compensate for covering closing costs.

Understand that buyers are also negotiating. Just because they ask for you to cover the closing costs, doesn’t mean they won’t accept the offer as is if you reject their offer. Additionally, many are prepared to pay a higher sale price in exchange for the seller covering closing costs, especially if they have enough financing to cover this. The reason some negotiate on closing costs is to alleviate the upfront costs of buying a home.

woman talking to a home inspector about repairs

How to negotiate after the home inspection?

It is not uncommon for a buyer to come back to you asking for home repairs to be completed. A home inspection provides the buyer with a thorough list of concerns about the home. Just because the home inspection presents issues that need repairs, doesn’t mean you have to address all of the issues to sell your home.

There are a few options you can use when you are presented with a list of repairs. If the repairs are minor, you can make the repairs. Other options include offering the buyer a home warranty, reducing the selling price, or offering to cover some of the closing costs so that they can make the repairs.

What if the buyer asks you to leave items that are not permanent fixtures in the home?

It might surprise you, but homebuyers often ask if you can include the window treatments, portable air conditioners, or even a pool table as part of the sale. How you handle this is really up to you. If the items are family heirlooms or something of value to you, you can specify which items you are willing to include in the purchase agreement. If you have furniture, or a family heirloom, one of the easiest ways to alleviate this issue is to remove anything you value from the home before you start showing it to buyers.

Our Santa Fe Real Estate agents can help answer of your questions about selling your home.

Posted in Selling A Home
June 14, 2021

When Buying a House Who Pays the Closing Costs?

If you are in the process of buying a house or thinking about buying a house, you might be wondering how the closing process works. When buying a house who pays the closing costs, the buyer or the seller?

This can be confusing for first-time home buyers. The closing costs are all the fees that are paid at the time of closing. These fees include the lender’s fees, title search and title insurance fees, mortgage insurance premiums, appraisal fees, and any costs associated with finalizing a mortgage.

Both the buyer and seller pay fees at closing, Typically, the buyer pays most of the fees required for closing. However, the seller will likely pay more actual costs at closing because they pay the real estate agent’s commissions and any of the fees associated with transferring the property.

realtor meeting home buyers at closing

What are the buyer’s closing costs?

A buyer should anticipate paying around 3-5 percent of the purchase price at the time of closing. This is in addition to the down payment required on the home. Although the down payment is a separate payment paid at closing, some lenders will combine the two and refer to it as “cash due at closing”. Typically, closing costs are paid separately.

Buyers closing costs include:

Origination fee
The origination fee is a fee that lenders charge the home buyer to pay for the set up of their mortgage. It covers the administrative expenses for verifying and processing your mortgage, or the costs to “originate” your loan.

Appraisal fee
A mortgage company will require an appraisal of your home before they will lend money to you. This is how they make sure that your home is worth the value of the loan.

Mortgage discount points
Some lenders allow home buyers to reduce the interest rate of their mortgage by paying some of the interest on their mortgage at closing. This amount is usually one percent of the mortgage amount and will reduce the amount of interest you pay over the course of your loan.

Title search and title insurance
This may be paid by the buyer or seller. A title search is required at closing. This makes sure that the title is clear, and that there are no leans on the property or that someone else can’t claim the title. Title insurance covers the home buyer if a dispute comes up later about by someone trying to claim ownership of the title.

Mortgage Insurance Premium
Some mortgages require buyers to pay for mortgage premium insurance. This can be expected on a government mortgage such as an FHA or USDA loan, and other loans that don’t require a 20% down payment. Mortgage insurance is basically insurance that covers the lender if you should default on your loan.

Escrow
An escrow account is created when you finance your mortgage. It is used as a prepayment of your property taxes or home owner’s insurance. This way the lender has a buffer to make sure your insurance and taxes are always paid.

realtor and clients meeting at title company

Sellers closing costs include:

Title Search and title insurance
This is usually paid by the buyer, but depending on the terms of the agreement, the seller may pay the fees for a title search and title insurance at the time of closing.

Transfer taxes or recording fees
When a home changes ownership, your state or local government may charge a tax or recording fee for transferring the property. The seller will be required to pay any prorated remaining taxes on the property.

Any outstanding amount owed on the house
If the property has a lien or judgment against it this must be paid at the time of closing.

Real estate agent commissions
The seller generally pays for all the realtor commissions involved in the sale, including the buyer’s agent commissions and sellers.

real estate agent negotiating closing costs

Can you ask the seller to pay the closing costs?

Closing costs can always be negotiated when you buy a home. Negotiating is typically part of the process of buying a home. According to Zillow, 81% of sellers will make some concessions when selling their home to help the sale goes through. Negotiating with the seller on the closing costs can be a way for you to afford more of the upfront costs of buying a home. The seller may not agree to this, but with the right offer, this is certainly possible.

While it may seem unlikely that a seller would want to cover the cost of closing, with the right offer some sellers will consider this option. Usually, when a seller agrees to pay the closing costs, it is because the buyer has agreed to pay a higher purchase price. This increase in the purchase price offsets the cost they will pay at closing. It’s a way for the buyer to get into the home and provides the seller with a reason to work with them.

Not all sellers are in the position to cover closing costs though. And, even if the seller agrees to cover the closing costs, most mortgage lenders will only allow the seller to contribute a certain amount towards closing costs. Depending on the type of loan you have, the seller may be able to contribute anywhere from 2-6% of the total purchase price towards closing costs.

Posted in Buying A Home
June 7, 2021

Is Buying Better Than Renting?

If you are currently renting and thinking about buying a home, you may have a lot of questions about the pros and cons of buying vs renting. Up until recently, homeownership has always been considered a major part of the “American dream.” However, these days some people are questioning whether or not buying a home really makes sense or if it’s a good investment.

Millennials, who have a higher education than previous generations, but also higher student debt, are substantially less likely to own homes. According to Forbes, 32 percent of Millenials own a home, compared to 60-75% of Gen X and Baby Boomers.

Because of this, some predicted the Millenial generation to become our first “renter generation”. Due to high student debt and other factors, some Millenials put off buying a home. However, this is changing. Millennials are getting older, have better jobs, and many are making the move to homeownership. In fact, according to a 2019 study, they make up the largest segment of new home loans. Why? Millennials, like previous generations, recognize the benefits of homeownership.

While each person has to consider their own financial situation, in most cases, homeownership is better than renting. Owning a home is one of the best ways to build equity and net worth. Aside from that, there are many other benefits to homeownership that make it better than renting.

Here are 6 reasons why buying a home is better than renting

couple buying a house

Homeownership increases equity and net worth

The National Association of Realtors reports that the average homeowner’s net worth is about 41 times greater than the net worth of someone who rents, That’s substantial. When you rent a house you are not gaining equity or increasing your net worth.

Your net worth is calculated by subtracting your liabilities from your assets, which includes home equity. According to a report by the National Association of Home Builders, housing accounts for over 60 percent of the average home owner’s total assets, making it an integral part of building wealth.

Homeownership costs less than renting

While the cost of renting varies depending on where you live, in most cases owning a home is more affordable than renting. This is particularly true in areas like Santa Fe and Albuquerque where the cost of renting has gone up 8 percent over the last year alone. With mortgage rates at record lows, now is one of the best times to buy a home in Santa Fe. Your monthly mortgage payment will most likely be less than what you are currently paying in rent.

 

homeowner holding credit card

Buying a home improves your credit score

Your credit score is determined by a mix of factors including your payment history, the amount of debt you owe, and the length of your credit history. Even if you pay your rent on time every month, it is usually not reported on your credit report. Owning a home allows you to add positive credit history every time you pay your mortgage on time.

Renting a home limits your options in a home

Although single-family housing is a growing segment of the rental market, it accounts for only 39 percent of the rental market. This means when you rent, you may have fewer choices in the type of home you rent. Most rental properties are owned by property management companies who invest in multi-family units or apartments. Additionally, because rental homes are often rented to several tenants over the years, they may not be as well cared for as a home that is owned. Landlords are required to make repairs, but because of previous bad tenants, they may not be maintained with the same level of care as a home someone owns. Homeowners often take better care of their homes because they consider them an investment.

man painting new house

You can make your house your home

When you rent a home, you have to follow your landlord’s guidelines when it comes to painting, decorating, or making improvements to the house. Most renters aren’t going to invest in improving a house they don’t own. When you own a house you can do what you want with it. Want to paint the cabinets or change your kitchen backsplash? If you own your home you can make improvements and make it look exactly the way you want!

You can have pets

While you can find rental homes that allow pets, many rentals do not allow pets or charge a fee for tenants who own pets. According to the Humane Society72 percent of renters own pets. Two-thirds of Americans own a pet, but for renters owning a pet can be a big problem. Finding rental housing that allows pets is one of the biggest reasons pets end up in pet shelters. Owning a home is one way to make sure your pets always have a home.

Posted in Buying A Home
May 27, 2021

When is the Best Time to Buy a Home in Santa Fe?

If you are thinking about buying a home in Santa Fe, you may be trying to decide when to start the steps for buying your home. When is the best time to look for and buy a home in Santa Fe? Should you start now or wait?

There are always factors involved in timing the purchase of a home. When interest rates are low when there are more homes available for sale in Santa Fe, and when it makes sense with your personal financial situation. Aside from these factors, certain months are typically better for buying a home. According to Zillow, the best time to buy a home depends on what your needs are. If pricing is your biggest factor, buying a home is in November is the best month to buy. More homebuyers shop for a house in the spring, so in a typical year, November is a great month to get into a home at the best price. If you are looking for more selection, April is better. On an average year, April has the most listings.

Is now a good time to buy a home in Santa Fe?

While there are general trends for when it’s best to buy or sell a home, this year’s market is not typical. If you want to buy a home or real estate in Santa Fe, New Mexico, now is a great time. With record-low interest rates, a fast-moving market, you could get into your Santa Fe dream home faster than you think. 

Santa Fe New Mexico homes

Here are a few reasons why now is one of the best times to buy a home in Santa Fe!

Interest rates are at a record-low

If you want to purchase your home at the best time, buying your home while interest rates are low is a smart move. According to a recent report from Freddie Mac, 30-year fixed-rate mortgages are averaging 2,95%. This is great news if you are interested in buying a home right now. With record-low interest rates, qualified home buyers have a great opportunity to get into the Santa Fe home they want. With interest rates this low, buyers will save money over the life of their mortgage and have a lower monthly payment.

couple in Santa Fe holding keys to new home

Senior economist at Realtor.com, George Ratiu, explains, “Buyers who purchased a home in the past year and locked in record-low rates will benefit from predictable monthly payments as a hedge against inflation concerns.” If you are thinking about waiting, don’t wait too long. Interest rates have been dropping, creating a boom in the housing market, but experts don’t expect this trend to last. If you are debating on when to buy a home, now is one of the best times. If you wait for the market to cool down, you could end up paying thousands more for your home over the life of your mortgage.

The cost of rent in Santa Fe is going up

The price of rent is going up in areas across the country. Santa Fe saw a 3 percent increase in rent from last year. According to RentCafe, the average cost to rent in Santa Fe is $1,285. If you buy a home in Santa Fe now, you would likely be paying less for your mortgage payment than you pay for rent. Not only would buying a home lower your monthly expenses, but you would experience the benefits of homeownership.

happy couple walking to their Santa Fe home

It’s an ideal time for first-time homebuyers to purchase a home as well. If you are currently renting, even if you don’t have a large down payment, now is a great time to start searching for a home. If you decide to wait until the market slows down, you could miss out on the best time to buy a home in Santa Fe.

Santa Fe homes are selling fast!

There’s no question about it, homes in Santa Fe and across New Mexico are selling fast. This might make buying a home right now sound intimidating. Maybe you’ve heard you shouldn’t buy a home in a seller’s market. The truth is, a fast-moving market means you can get into your home quickly. The sooner you get started, the faster you can be in your own Santa Fe home! If you don’t know how to get started, give our team a call. We can help you with all the steps of buying a home.

Posted in Buying A Home
May 20, 2021

How Much Should You Save For a Down Payment?

Taking on a mortgage to purchase a home is a huge expense. The down payment is vital. How much money should you put down? Determining how much you should save for a down payment is a critical part of the home buying process.

A down payment is the amount of money you can offer upfront for a large expense. It is a percentage of the full purchase price. The higher your down payment for a home is, the less expensive your monthly mortgage payment will be. The more you can pay upfront, the less you pay over the life of a loan. Lenders often require a down payment to minimize their lending risk. How much you save for a down payment affects the amount you will be borrowing.

women calculating how much she has saved for a down payment

How much do you need for a down payment?

This depends on the type of mortgage you are attempting to obtain. Different lenders have different requirements. It may seem like making a large down payment is the most important factor in buying a home, but that is not always the case. How much you have saved must be factored in with how much your monthly income and expenses are. If you have a lot in savings but a low monthly income, then making a large down payment can be useful to keep your monthly payment lower. However, if you make a steady, good monthly income but have next to no savings, you may want to explore low or no-down-payment options, depending on what your lending company offers.

mortgage application

Do you need to have a 20% down payment?

This might have been the standard at one time, but now the typical down payment for first-time buyers is only around 7%. While putting down at least twenty percent can up your approval chances, along with a good credit score, it is not always necessary. More and more lending options are available to people who do not have 20% to put down. In some cases, such as FHA loans or VA loans, you really only need around 3-5% for your down payment. There are also loan types that will allow for $0 down. Nearly all of these options require you to buy PMI, (private mortgage insurance). Check with your lending company to find out what options you have available.

car for sale by owner

Tips for saving for a down payment on a home

Remember that homeownership comes with many costs beyond closing fees. It is important to avoid draining your entire savings account for a down payment. Everything from buying a lawnmower to paying property taxes will mean some of the money you have been stashing needs to extend further than the cash you bring to the mortgage office. Try to make a habit of transferring a fixed amount to a special savings account every month. If you have anything worth selling, such as an extra vehicle or discarded hobby like a guitar or sewing machine- now is the time. Lower your expenses and consider skipping vacations for a year. Dedicate yourself to the funds of your upcoming investment. Sacrifices you make today to save for your down payment tomorrow will pay off in the life of owning your own home.  If you're ready to get started, contact The Bigelow Team real estate experts in Santa Fe.

Posted in Buying A Home
May 10, 2021

What is a Good Credit Score for a Mortgage?

You probably know that having a good credit score is a critical part of qualifying for a mortgage. If you are ready to buy a home, one of the first steps you should take is to take a look at your credit score. Lenders use your FICO score to determine who they will loan to. Your FICO score is not the only thing lenders look at, but having good credit gives you the best opportunity to qualify for a mortgage with low-interest rates.

If you don’t have excellent credit, you can still get a mortgage. You just won’t have as many options and your interest rate might be higher. There are a variety of programs for homebuyers with poor credit, but before you start searching for a home, read more on how your credit score affects your mortgage.

What is a good credit score for a mortgage?

Clearly, a high credit score is ideal when buying a home, but a good credit score is all you need to qualify for a conventional mortgage. What is considered a good credit score? A score of 740 or more gives you the best odds of qualifying for a mortgage with lower interest rates. However, to qualify for a mortgage most lenders only require a minimum credit score of 580.

Every lender is different. If you have a high credit score (740 or above) you should have no problem getting financing. But even if your credit score is not perfect, a 580 or above should be sufficient for qualifying you for a mortgage. A score of 620 will qualify you for the more popular Programs, such as First Time Home Buyer, Next Home, or the Hero Program.  A score that is lower than 620 may make it difficult for you to find a lender to finance your mortgage.  However, we work with several lenders who can help!

credit cards in wallet

Minimum Credit Scores & Loan Types

Each lender uses its own criteria for determining who to lend to. There is not a universal number that will guarantee that you qualify for a mortgage, but most lenders look for a score of 620 or higher. What score you will need really depends on what type of loan you are getting, and whether or not it is conventional or government-backed.

These are the most common loan types and minimum credit scores needed to qualify.

Conventional Mortgage: minimum credit score 620

A conventional mortgage is a type of loan that is not backed by the federal government. Conventional mortgage lenders use different requirements to determine who they loan to because the loan is not insured or guaranteed by the government. In order to qualify for a traditional mortgage, you need to have a solid credit score. There isn’t a set number you can use as a guideline because each lender determines their own minimum score and criteria for financing. While a minimum credit score of 620 is recommended, that doesn’t guarantee that you will qualify for a conventional mortgage.

savings for a mortgage

FHA Loan: Minimum credit score 580

The FHA is a government agency that provides mortgage insurance to FHA lenders. This government agency allows homebuyers who are not able to qualify for a conventional mortgage the means to qualify for a mortgage. If your credit score is below 620, an FHA loan may be the best fit for you. 

There are some drawbacks to this type of mortgage though. With an FHA loan, you may be required to pay a mortgage insurance premium if your down payment is less than 20% of the value of your home. Your home must also meet FHA approval before you can purchase it. 

An FHA Loan may be a good fit if you don’t have enough saved for a 20% down payment. FHA loans allow you to purchase a home with a down payment as low as 3.5%. To qualify you need to have a credit score above 580. If your credit is below 580, a 10% down payment is required.

VA Loan: No Minimum Credit Score

A VA loan is a type of mortgage that is backed by the U.S. Department of Veteran Affairs. To qualify for a VA loan you must be a U.S. veteran, active duty service member or widowed spouse to a service member. The VA does not require you to have a minimum credit score to apply for a VA loan. However, VA loans are issued by private lenders so the lender may have a minimum credit score requirement. This will vary from lender to lender.

A VA loan allows you to purchase a home without limits on how much you can borrow. Unlike an FHA home loan, you can finance a VA loan without a down payment, and there is no fee for mortgage insurance premiums. Being able to buy a home without a down payment is one of the biggest advantages of qualifying for a VA loan.

Veteran's Day flag

USDA loan: Minimum Credit Score 640

A USDA loan is a government-backed loan program run by the U.S. Department of Agriculture that helps homebuyers in rural or suburban areas with home loans. A USDA loan, like the VA requires no down payment.

The USDA does not have a minimum credit score requirement, but according to Experian, most lenders require a credit score of at least 640. To qualify for a USDA loan your home must be located in a qualified rural area and you must meet income guidelines for the local area.

What if I don’t have a high enough credit score for a mortgage?

While there are many ways to finance a home even if you have bad credit, it may be better for you to boost your credit score before buying a home. Buying a home with poor credit can mean paying more for your home in interest and mortgage insurance premiums. However, if you have a low income to debt ratio and are ready to purchase a home, there is no reason you can’t purchase a home. Talk to one of our experienced realtors to find out how you can get started on buying a home.

Posted in Buying A Home
May 3, 2021

Steps for Buying a Home

There are some steps you should take if you plan on buying a home. Buying a home, especially if it’s your first home, can be stressful. It’s a good idea to start making a plan for buying a home before you actually start the process. It generally takes about six months to find and purchase a home, but if you have some of the steps out of the way before you get started it will make the home buying process easier. Here’s what you need to know before you start searching for a home.

The first step to buying a home is planning your budget

Before you can get started, figure out how much you can afford to pay on a monthly payment. You can use a mortgage calculator to get an estimate of what you can afford. If you are already paying rent, you can use your rent as a guideline for what you can realistically afford to pay per month on a mortgage. However, the budget you will actually have to work with when buying your home will be based on how much your mortgage lender is willing to lend you.

laptop showing homes for sale

Start working on a down payment for your home

Before you can start searching for a home, you need to have a down payment together. It’s best to have a down payment of 20% of the home’s selling price. This way you can eliminate fees for mortgage insurance and have a lower monthly payment. Most conventional mortgages require a down payment, but there are loans you may be able to qualify for with no down payment.

Check your credit score

Once you are ready to start looking for a home, you should check your credit score. Lenders will evaluate your credit score, your income, debt, and employment history when deciding whether or not to lend to you. Your credit score is also an important factor in the type of loan you can qualify for and the interest rate you will pay on your mortgage. 

You can get your credit report for free once a year at AnnualCrediReport.com. If your credit score is not ideal, start working on improving your credit score before you start house hunting. Once you know where your credit stands, you can work on making payments on time, paying off or disputing debts reported on your credit report. A higher credit score will allow you to qualify with more lenders, and get better interest rates when you are ready to qualify for a mortgage.

credit score

Find a realtor

When you are ready to start the process of buying a home, contact The Bigelow Team. We have a team of real estate brokers who can help you through all the steps for buying a home. Give us a call at 505-318-1000 with any questions you have about how to get started.

Get pre-approved for a mortgage

What does it mean to be pre-approved for a mortgage? Getting pre-approved means a lender (or multiple lenders) will review your credit score, your debt-to-income ratio and your overall financial background to determine how much they are willing to lend you. This step of the home-buying process will tell you exactly how much money you have to work with when you start your search for a home.

Start your home search

There are a lot of steps to go through before you can even start looking for a home, but the more steps you have out of the way before you get started the faster the process will go. Your real estate agent can be your best guide when you search for a home. If you are a first-time buyer, you might want to go it alone, but your real estate agent is an excellent resource for finding you exactly what you want in a home. Make a list of what you want in a home, and what location you’d like to search in. Then talk to your real estate agent so he can schedule a tour of the home.

realtor showing a home buyer a home

Make an offer

When you find the home you want to buy, it’s time to write the offer. The purchase offer, once accepted, is your purchase agreement with the seller that you are committed to buying their home. It will contain an agreement to pay earnest money (a deposit on showing you are committed to purchasing the home) and the terms of the agreement. Talk to your realtor about any contingencies you’d like to include in your offer. Most offers include a contingency for a home inspection to be performed before acceptance of the offer.


After you make an offer, the seller may make a counter-offer. There can be some negotiation when settling on an offer, but keep in mind that until your seller signs the agreement, they are not obligated to sell to you. Your realtor can help you with the right strategy for having your offer accepted.

Get a home inspection

Once the seller accepts your offer, you can schedule a home inspection. While it’s not required in most cases, it protects you as a buyer from purchasing a home with unexpected issues. If your home inspection goes well, you can move forward with securing your financing and scheduling the closing.

Get the home appraised

Getting your home appraised is one of the final steps to buying a home. If you’ve been pre-approved for a mortgage, your lender has approved financing for you to purchase a home for a certain dollar amount. In order to verify the home is worth the amount of money they are lending to you, mortgage companies require a home appraisal. The home appraisal is a report that tells the lender (and you) how much the home is worth based on comparable sales of homes in the area and an assessment of the home and property.

realtor handing keys to home buyer at closing

Closing on your home

Once your financing is completed, you’re ready for closing. You may be tempted to finance furniture or appliances for your move-in. It’s important that you wait until closing to make any large purchases on credit before you close. Lenders usually pull a final credit report before they actually fund your mortgage. So wait until you have the keys in your hand before you purchase anything on credit.

Closing day usually takes a few hours. You’ll meet with your realtor at the title company to sign paperwork. Your realtor will let you know what you need to bring. Typically, you will need your legal identification and funds to cover the closing costs.

Move in!

You will receive the keys to your home at closing. The seller may provide you with information on who they use for utilities, cable, or internet services. Once you have your keys you can set up the utilities on your home and move in!

Posted in Buying A Home